tv Bloomberg West Bloomberg June 17, 2014 11:00pm-12:01am EDT
>> live from pier 3 in san francisco, welcome to "bloomberg west." ahead, amazon has conquered e-commerce. now it is aiming for smartphones. the company is expected to unveil the first amazon smartphone added event in seattle tomorrow. the move will give amazon another platform to sell millions of products. at&t is said to be the carry of the phone. facebook is taking its aim met snapshot witht
its own messaging app. slingshot needs to reply with their own photo before they can see what someone else sends them. oracle is close to buying micros systems four 5 billion dollars. -- micros systems for more than $5 billion. this be the biggest acquisition since 2010. charlie story of the day, amazon is adding a new chapter. they are going to enter the ultracompetitive smartphone business, unveiling their first smartphone added event tomorrow. we think that is what is happening. jeff bezos will host the event. a smartphone will give amazon another way to push its online store as long as it's library of digital content. while we learn the specifics of the phone tomorrow, he dropped one hand. he sent a copy of a children's book to members of the media.
cory johnson here in the studio along with brad stone, author of "the everything store." >> you are going to be in seattle tomorrow. >> what is it about? >> it is about a man named mr. mine who lives in the street. he turns his house into a different house than the others on the street. brad's book is better. >> you know bezos better than anyone else out there. what clue does this give you? >> it is a metaphor for how amazon wants to be viewed. these phones look and work very much alike. he wants to do something different.
this phone is going to have a 3-d screen. it has four cameras that are there to bounce infrared signals off your eyes. tracking your head movements and projecting a 3-d image. that is going to differentiate the phone. >> do you think amazon can do this well? >> amazon has a building in amazon headquarters or they have been working on harbor projects -- hardware projects for quite a while. we have seen the kindle in many iterations going back five years now. we have seen the success they have had with those different devices, it is unique to the kindle. we see their attempt television. i think they are willing to accept their the only business -- they might be the only business in the world where they are willing to do something at size of lower margins than other smart phone carriers. >> they are very patient. even in all this categories the first version of a new category, they are never knocking it out
of the park. the first kindle didn't get spectacular. they innovate. bezos has such control of that company. he can really invest without shareholders hitting scared. what we will see tomorrow is the beginning. we are going to see them continue to iterate on them. >> do you think a phone can change amazon's bottom line as the candle business may have? >> it can make it worse. they are investing in heavily. if you get close to the customer and go through google, you get the customer who will buy more, then perhaps over the long-term it does. >> what it could change is the top plan. we know amazon isn't really insisted in the bottom line. the way that this phone which has so many customers already, so much about the credit history of the customers, the way it could drive sales of other stuff through the amazon store could
be massive in people carry their phones around an absent taken off in the same way. >> we were looking at the hyped phones that flopped. the moto x, blackberry z 10, the windows phone hasn't done well. who is to say this isn't going to be one of those? >> we may never know. amazon doesn't disclose its hardware sales. they may sell for at&t stores. but clearly they are going to be selling a lot of these phones themselves. >> we still don't know about kindle. we don't know the hard numbers on amazon prime. >> how important is price your? the smart phone market in the united states is saturating. the real world is happening in developing markets. >> that is one of amazon's core
strengths. it's willingness to go and subsidize the hardware itself to get clear data plans. as they rolled up their music service they are setting up services to be innovative on capabilities. as we spoke about, amazon can differentiate. >> amazon is famous for getting lower prices for their customers. the customers who shop the most using iphones, while amazon is a lower phone, they may get the customers who don't shop is much, when the goal is to drive revenue through the store, which they don't get with a cheaper phone, a better phone. >> at&t is reportedly the exclusive carrier.
good or bad move for at&t? >> it is as they can only make so many phones, there were only so many chips that would make a design around the phone. it limited the design problems and their production risks. >> we will see if at&t is selling these phones. amazon wants to control distribution itself. if at&t is carrying it in stores it is probably good. it is another reason with technology in the 3-d screen to walk into an at&t store. >> cory johnson, you're going to be in seattle tomorrow. thank you both. tesla and uber see huge business opportunities in china. they're taking on the chinese market together. we have details on how they are teaming up, next. ♪
>> welcome back. i'm emily chang. president obama is announcing a new program in pittsburgh today to help the nation's inventors and encourage manufacturing for the giving inventors access to $5 billion worth of equipment at over 700 federal research and development centers. this includes equipment like nasa wind tunnels that most inventors could not afford on their own. uber and tesla are partnering to testdrive the chinese market tomorrow offering a free trial for the model s. tesla is facing regular tray battles in its own backyard.
-- facing regulatory battles in its own backyard. the general assembly approved a bill to allow direct sales to consumers. cory johnson is with us and matt miller in new york. and larry downes, project director at jonestown university. thank you all for joining us. the move in new york sounds optimistic. >> it has to get through the senate. we don't know if that is going to happen. there is a lot of backroom deals going on. in new york there are a lot of compromises. there is fighting between the dealers and the automakers themselves. they're using this -- it is like world war i ended and we froze the up-ice lobbying countries. -- froze the yugoslavian countries. when they broke apart all these old fights comeback 100 years later. >> i read the tesla release, the governor's release.
it suggested that peace and growth for tesla. they can keep their five stores. and they can open up more stores. under the new franchise law. tesla doesn't want franchises. tesla is stuck with five stores. this comes on the same day they talked about the model x. that they are looking at in 2015. >> go ahead. >> they are only selling 22cars. how much could they make. that is one thing. another thing is this will change in the future. people want to buy cars this way. they vote and they will make it clear and the dealership unions and family groups, whatever they are, will not win the item in -- will not win this fight in
the end. >> here is why matt miller is wrong again. it might change in the future. there will not the a change in new york state. the new york a will limit them. it is fine if you're going to sell 22,000 cars. if you want to compete with honda and ford in places like new york, tesla cannot get here. unless they can open up more stores. >> they do not compete with honda and ford yet. they sell millions of cars. they recall millions of cars. tesla is only going to sell 35,000 this year. >> how popular are tesla on the east coast? anecdotally in the bay area, they seem to be everywhere. >> i see them all over the place. they are very popular for superrich people. you will see them, especially around new york and san francisco, where real estate costs more than anyone in middle america would actually believe, and people are willing to do more than $100,000 on a car. it is a pretty small market and can easily be met by four stores in new jersey and five stores in new york.
at least for now. they will not sell in the next five years more than 100,000 teslas a year, even when you bring in the model x. they do not really need much more and the consumers that want to buy a car this way, who fairly were in a free country must should be able to buy a car this way and should get to. >> larry, you wrote a really interesting is in the washington post indicating it is not as bold as it sounds. >> patents are filed or defenses purposes. -- patents are filed for defensive uses. it is unlikely tesla will have offenses use of these patterns. many have age to a certain point. the patent is an odd piece of property. one day, it turns into public property overnight. when the patent expires. 20 years or less when these are different ages.
some of these are starting to age. the bigger story was about why they are trying to do this. they are trying to do themselves as a company doing good and that is all about sustainability. because when you are selling a luxury, you want consumers on your side. that is the only way to win fights with regulators. the way to do it is appeal to these values. >> let me tie those things together. one of the things we saw in new jersey and new york, we saw democrats saying this is a green company and we want to support this green company. we will change our franchise in the case of new york, suggests and not change the laws because we want to support a company doing good things. yes, it is a car for millionaires but an electric car and closer to good than other combustible cars for millionaires. >> and made in america. more than any of the other american-made cars. >> i think the most interesting and as far as sharing patent, i
thought it was interesting is far as insight into the way elon musk feels about the ceo role as agent. his concern was more about this success of electric cars in general than the success of tesla as an electric our producer. if i were a shareholder, that would really bother me. >> what do you think of this partnership in uber? >> i think it is a publicity stunt and they cannot really sell that many cars in shanghai anyway. they only have 10 dozen tesla's in there to begin with. it may be interesting if you get a 15 minute attempt at trying to drive a tesla around a super traffic jams up shanghai. i do not know. it would not be that great. >> would you rather have a kitten, or a tesla? >> a tough call. i will go with kitten. thank you all for joining us
there is a catch. in order to receive a photo or a video, you have to send one. so i can't unlock what you sent until i send you something. >> early reviews? >> it has done well within the facebook employee community. other than that this is the first day, a first test. >> do you think facebook is trying to adapt snapchat? is that the goal? >> mark zuckerberg says in retrospect, the poke was a joke. if it had actually succeeded, they would have taken ownership of it ver. employees at facebook decided this would be fun to build, and then it is a part of their creative labs. they are not a big deal for facebook now. it is a small thing. if it works, it does.
it doesn't hit their bottom line. >> facebook messenger is working out. the paper has fallen off the radar. are there any standalone apps? >> camera killed earlier this year. they hadn't been updated for a long time. facebook and instagram, they have to prove they can make products that resonate with users. they don't have to go and acquire everything. >> can they continue to build? >> right. investors are wondering -- every couple of years we will have a multibillion-dollar acquisition. is that sustainable? facebook has to show we can try new things. we can have this start up within a larger company. some work out. some want. >> time will tell if this -- someone wrote. >> time will tell if this
sticks. i feel like you get a few days and you know. thank you so much for the update. we turn now to our wire in the world series. we are looking at how to technology is changing health. options for prosthetics are very limited but now am a multiyear to chelating bionic hand is commercially available and they can even link up to your smart phone. here is a look behind the i-limb. >> i would say this is the most advanced. when you see the opening to the hand, you see the fingers curling and grasping the item i'm holding onto. i lost my hand wake boarding in 2006. as soon as i did there was a slack in the rope.
and i missed the handle completely. the handle wraps around one time. unfortunately it was a blood clot and it cause the blood flow to stop to my hand. since i'm an amputee, my personal knowledge with with prosthetics played a huge part. -- a huge part with talking with patients. from the day i started looking at prosthetics. they have changed to this day. that has only been eight years. it went from being able to open and close, very mechanically, not a large opening or anything like that, to where we are now. ♪ it has six motors and its of the thumb will move in a different position. all the fingers move. this is the more advanced one. as soon as you open the app up it syncs with the hand. i can click on one of those pictures and it will move the hand into that position. then i can open and close from there.
in public, kids come up to me all the time and ask if i'm ironman or batman. they will say, that is so cool. it is me making it easier. i can hold my dog in one hand and hold a cup and the other. things like walking up to an atm, being able to pull out my wallet and hold my wallet and put the card in and use the touchscreen, the simple things that when you hear about them, anyone can do that. not all amputees can. >> the i-limb. we will be right back with more bloomberg west. ♪ >> let's get you up to speed with where stocks traded today. higher across the board. the s&p 500, the dow up by 10%. three days of gains for u.s.
>> you are watching "bloomberg west." oracle is close to a deal to buy micros systems for more than $5 billion. that is according to people in this will be the biggest acquisitions since micros systems. it is time for our segment with yahoo! chairman maynard webb. he formerly served as the coo of ebay. he currently sits on the board of ebay along with yahoo!.
how to find valuable employees early in the game. a company in the spotlight is twitter. it has lost four executives in recent months. what steps should twitter be taking? let's ask maynard himself. you were a coo. i'm curious to see what you have to say about the situation. when you see an executive and a coo leave a company that just went public, what do you think? what is going on? >> first of all, i do not know exactly what is going on because i am not inside. but i would say a coo is an interesting role and is defined differently different places. in this case a lot of people have operational background, but there are coo's more sales marketing experts. i think what really is important is for companies to identify
what they really need and to make sure there is a chemistry and a partnership between the coo and the ceo. a very strong bond. >> we were thinking of successful ceos. tim cook used to be the coo of apple. there are times where it has not worked out. castro at yahoo!. the coo can be a weird role. in some ways, it can be more difficult to succeed. can it be more ambiguous? >> i was coo for years before he became the president of technology. there was a lot more definition about what you were supposed to do as a cio or cfo. many companies do not have coo's.
often, it really a tandem that goes to offset things the ceo does not want to focus on or needs help on. i had a beautiful partnership. we were a great pair. >> ben has written about being wary of shares and other -- of shared command and other investors said they will not invest in startups if you have a coo. do you think companies should avoid creating that position? >> it depends on the size you are and where you are and, frankly, most aol jobs that are -- most ceo jobs are so big that having a trusted lieutenant to do a lot of the things they are not excited about doing is something that works well, or maybe stronger and brought more of technology pieces and operational pieces to ebay. it was important that we had carved out roles and communicated well.
coo is in general need to have a low ego. if you have a really high need, that can lead to issues. >> the cost is working on bringing in new talent, he is the new head of product. how do you find good people to fill those very important roles? >> it is much easier at a twitter and you are trying to get started then when you're trying to find who to invest in. dick should be thinking about what he needs, not just now but two or three years from now. when i hired, i always tried to hire someone who would be willing to do today's job and scale easily. when you are the size of twitter, and you got to figure out what you need most, the reason why i joined ebay was because they needed someone on their account systems.
and was willing to do the heavy lifting. a lot of people who got called for the job went away screaming. >> i was speaking with a twitter investor who said once the culture of a company is set early on it is difficult to change. twitter has had many management reshuffles. how difficult is it going to be to get the house in order? >> leadership transcends almost everything, in my opinion. like, ebay had one culture. we implement another culture much more tied to execution, making sure we made amendments and lived up to those. i am not at liberty to talk about yahoo!, but you can see a massive cold chill -- massive cultural transformation that has happened in a short time with marissa. it is all about leadership. you have to figure out what to take with you, that is always good.
what to stop doing that used to work but doesn't, and what to start doing now. >> when you are advising a company at the early stages, how do you suggest they find the best people? it is better to make those decisions early. >> the longer you can run with people, my best career decisions and hiring decisions have been people i promoted and they went further than you might have ever imagined. my worst decisions were bringing in the rockstar with the pedigree from the outside. >> is it a safer bet to promote from within? >> it is a different time. if you know the person, you should give them every opportunity to try to step up. at ebay we found people stepping up in amazing ways. what i look for in investment companies is somebody that is street smart. not just good iq, but notes to
-- but knows how to get things done. one of my companies that example finds that, a scrappy guy who came from humble beginnings, got bored at school and started a company, now he is rocking and rolling. street smart is one. the number two i look for is somebody who has a bit of something to prove. the underdog kind of mentality. that was an entrepreneur from an early age am a out talking -- early age that was out hawking the papers, building a product, doing something when they were 10 years old or 12 years old. that is a good predictor to where it goes. finally, passion. think of mark benioff. how the world is crazy about the cloud and where it is now. it is all important. >> what happens when you make a mistake? >> fix it fast. everybody makes mistakes. if you go ask people, do they wish they fired anybody a lot more slowly, most times the answer is no.
>> but you want to give that person a chance, and you want to save face. >> yes. the first thing i would do is, is it fixable? if it is not, how do we make sure we treat them with enmity and respect, and route them to -- with dignity and respect en route to the next gig? it is a long life. a mis-hire is not the employees fault as much as it is the hiring organization stuff all. -- organization's fault. >> always great to have you on the show. i love our office hours. i always learn so much from you. thank you. as tech giants like google and apple expand health products, who is helping them can like your data? -- helping them collect their data? we look at the health apps that could be the key to their success, next. ♪
this is "bloomberg west" on bloomberg television streaming on your phone, bloomberg.com, amazon tv, and amazon fire tv. we have been covering health care and technology in our wiring the world series this week. running keeper in my fitness pal have become all the rage. how can doctors and hospitals put this to use? our resident health junkie cory johnson is helping out with more. >> a twinkie junkie. i do not know. there are so many of these things that give lots of data, gather lots of data. they've got tens of millions of users. one i keep running into, the ceo joins me now to talk about the future these things have in tech. i do not use your app but a lot of friends do. i am thrilled you are doing this is kind of work. i think it is leading to more people being fit. >> it is incredibly powerful.
our users have actually lost over 150 million pounds combined. >> they have misplaced it. it is out there looking for them. what do you know about your users? what is the typical use case? >> when you are as big as we are, the demographics, over 65 million users. you start to resemble the population as a whole. we have a broad set of users. we have a lot of who are bodybuilders, pro athletes, cyclists. people who of medical conditions, and we have a lot of people who have never exercised before trying to lose weight and lead a healthier lifestyle. >> it seems it is the basic law of thermodynamics. it measures the calories. >> it is pretty similar. almost all diet, that is what
they're trying to do, get you to complete the calories you eat. if you do that, you're going to lose weight. that is we try to help people do. >> talk to me about how the evolution of the case changes. emily was teasing. i tend to be concerned about my fitness and lately ironic. -- and lately i run. i use the up tracker to monitor my steps. that has helped a bit. what we start understand about the users of these products is it is geared to the fitness and geese, not to the average public that would benefit from them. >> i don't know if that is the case with our population. we have a lot of people, everyday people. >> how does that change? >> as people get engaged with my fitness pal and have success with it, the kinds of things they want to do changes as well. it becomes not just about calories but they nurture should've balance, are they
-- their nutritional balance, are they getting enough nutrients, are the macro ratios correct? carbs, proteins, fats. how they keep those in balance. those are the things that people start to do as they become more power users. >> where is the money in this industry? >> there's a ton of different ways we can monetize our service. one is, this product has value to people. it is an incredible pinpoint for people when they are overweight. it affects their job prospects, their social life. they are willing to pay. it is clear if we can create a premium product that has value to users. >> look at jenny craig, look at weight watchers, look at the gym. a lot of money to be spent. the golden goose and all of this is the insurance companies and employers who want employees to be healthier. >> absolutely. there is a change happening in medicine today.
the movement towards accountable care is driving physicians to shift from sick care to well care. there is going to be a lot of interesting products that can be more on the preventative side, help people get ahead. >> are they writing the checks yet? >> there are early signs that is happening. that is going to happen in the future. the idea of digital therapeutics. products and services that can have a positive impact on people's lives that have value, that in terms of impacting health care costs, in terms of impacting companies and bottom lines, companies like ours should be will to capture the opportunity. >> good work you were doing. we appreciate it and thank you for your time. >> still ahead, why the founder of french or must organize the ter wants tos o
>> welcome back. i'm emily chang. our news aggregators the solution for information overload? some investors think so. nuzzel raise more money. -- it makes it easy to see new stories that are shared by your friends on twitter and facebook. jon erlichman joins us now with more. tell us all about it. >> everyone is trying to crack the code of news aggregation, including the largest layers in the world of social media like facebook. jonathan abrams joins us now . for those who have not played around with nuzzel, give an explanation of how works.
>> it is a website and cap that shows you the top news stories shared by your friends on facebook and twitter. >> one of the things that people will notice if they are using it is you see the numbers. if your friend share one particular story 10 times, you have to get a sense on what most of your friends are talking about. is that right? >> we show you the number of friends that have shared the story, liked it, or tweeted. and we have the top stories at the top. you can see the context behind how many people are sharing the stories. >> a lot of players are thinking about this, doing a better job of delivering the stories. what works, what doesn't work? >> it is true that silicon valley tech types have built a lot of aggregation products over the last 10-20 years. what makes nuzzel fun is that it is easy.
we try to create a very simple experience. you see a lot of people love it. it is the utility but people love it. >> you mentioned twitter. it is a great way to get the word out about your product. but, is it a rival to you? or it is a place you can help to further distribute the story of what nuzzel is? >> it is the latter. nuzzel makes twitter better. it is great for people who like twitter. it helps you find stuff you may have missed. a lot of people who love twitter use both. it doesn't show you all the tweets from your friends. it doesn't show you videos or photos. it shows you the top news stories. >> if we do seem less time spent going forward on some of the bigger social media platforms, facebook or twitter, what does that say about the value of news aggregation that highlights the people are talking about?
if those are less relevant? there are a lot of questions now about how much time people are spending every day on facebook and on twitter. >> i don't think those services are less relevant. i don't think time is down. there is more and more sharing going on so it is getting hard. it is overload. people cannot monitor their facebook and twitter every second of every day. as i'm sitting here now, people that i have chosen to follow are sharing stuff i may have missed. nuzzel helps you see the stuff you may have missed. >> thank you. back over to you. >> thank you. it is time for the bwest byte where we focus on one number that tells a whole lot. cory, you have the by. >> the oracle micros systems deal. looking at these companies, micros systems is never been
mentioned on the show. >> they sell software to hotels, restaurants. >> it is an interesting business. they are at the point of purchase where a lot of credit card data is exchanged. he software used by restaurants and hotels, used to capture the information. in the context of the opentable deal with priceline, you have oracle doing this deal where they are getting connections, understanding how people are using it. last year's revenues for micros systems were massive. this is a big business. just capturing the data and running the charges from credit cards and doing that software. when you go to random hotel sites and the website looks similar, quite often that is a micros systems system.
>> why does this deal makes sense for oracle at the price? this is a big acquisition potentially. >> it is about the pricing. one of the things this is for oracle is it broadens the place. 10 years ago, the only people used with oracle software were database engineers. oracle made a big change in the sight of a wanted to own software and all sorts of particles. if he ran a factory on software they require j.d. edwards. they want to run that software. they went out and bought a battle to obtain peoplesoft. of verticals lots in the places where people use software, and a lot of rings that happen in between. the software stack from the end user to the processing of data, and the things in the middle. >> is it a red flag that oracle is trying to get growth reacquisition?
>> it is definitely change from the old oracle. it is the kind of thing we have seen over the course of the last decade. i think they have seen a lot of innovation happen a way from them. some of the innovation, as they like to talk about their clouds and the public versus private clouds, fundamentally, software to service goes against everything oracle has done. historically oracle has said we will work review for three years -- work with you for the next three years and take $10 million to 30 million dollars and do long-term implementation to your business build on the infrastructure of oracle payroll. >> software to service is the way they are going. >> they are diametrically opposed. it is hard for them to coexist. >> thank you for joining us. we will see you later. ♪
>> do not miss these inspirational stories of cancer survival in the following program brought to you by cancer treatment centers of america. >> this is a story about fighting cancer, a story about fighting complex and advanced stage cancers, heart breaking cancers, but it is not a tragedy. it is a comeback story, because these people -- rod, melanie and